Novartis AG (NVS) Stock Rises on Plan to Increase Profit Margin

NEW YORK (TheStreet) -- Novartis AG (NVS) shares are up 0.39% to $101.49 in afternoon trading on Thursday after the biopharmaceutical company said that it expects to increase its profit margin this year amid cost cutting initiatives and a restructuring of its drug portfolio.

The company said that it is focusing on execution and innovation as it looks to strengthen its bottom line.

Part of the company's transformation is the divestiture of its influenza vaccine portfolio to CSL (CSLLY) which is expected to close in the second half this year.

"While we continue to improve productivity and generate leverage, our capital allocation priorities remain the same: investing in the existing business, growing the annual dividend, bolt-on acquisitions, and share buybacks," Novartis said in a statement today.

TheStreet Ratings team rates NOVARTIS AG as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate NOVARTIS AG (NVS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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